IDAHO
PUBLIC UTILITIES COMMISSION

Case
No. IPC-E-06-17, Order No. 30227

January
30, 2007

Contact:
Gene Fadness (208) 334-0339

Residential
and small-business customers of Idaho Power Company who participate in the
company’s net metering program by generating their own electricity and selling
their surplus (the amount that exceeds their consumption) back to the company
will continue to be paid the full retail rate rather than a wholesale rate, as
originally requested by Idaho Power.

However,
an order recently issued by the Idaho Public Utilities Commission allows Idaho
Power to include power supply expenses associated with the net metering program
for residential and small-business customers in its annual power cost
adjustment (PCA) process for possible later recovery from customers.

Idaho
Power has about 27 residential and small-business customers who offset their
own power consumption by generating their own power with small hydro, wind or
solar projects. Another 13 customers have pending requests for net-metering
generation interconnects.

In
August, Idaho Power filed an application with the commission to pay
net-metering residential and small business customers an amount equal to about
85 percent of the wholesale market rate for electricity rather than the full
retail rate for that amount of generation that exceeds their use. In December,
the company modified its application to leave the rate paid for excess
generation the same. The final order issued by the commission leaves the rate
the same, but grants Idaho Power’s request to recover expenses associated with
the net metering program through its annual power cost adjustment process. The
order also grants the company’s request to remove a financial impediment for
customers in classes other than residential and small-businesses to participate
in net metering. The order removes the requirement that those customers have a
second meter.

In
its original application, Idaho Power asserted that excess generation from
residential and small-business net metering customers is “non-firm,” or
intermittent. Thus, those customers should be paid the same rate – a lower
wholesale rate – as all sellers of non-firm energy. Under the current system of
paying full retail rate for excess generation, Idaho Power said it does not
recover its full costs of providing service to net metering customers and that
those costs are shifted to the remaining residential and small-business
customers who do not have net metering. Customers do get the full retail rate
for all the energy that offsets their own consumption, but the company believes
that generation in excess of the customer’s consumption should be viewed differently.

The
commission said the amount of excess generation sold back to the company by net
metering customers is not substantial enough to warrant a revision to the
tariff. The cumulative capacity of existing net metering projects is 336
kilowatts and the total amount paid for the projects’ excess generation over
the past 12 months was $23,102. “If this increased substantially, it would be
necessary to reconsider the pricing of excess generation. There is no need for
that reassessment at this time,” the commission said.

The
commission cautioned potential net metering customers against relying on
continuation of the current tariff when calculating their investment in net
metering projects. “We must note that the net metering program price is a
tariff rate. It is not a contract rate. As a tariff rate, it is subject to
change,” the commission said. “A persuasive argument could be made that net
metering customers are being subsidized by other customers.”

A full text of the
commission’s order, along with other documents related to this case, are
available on the commission’s Web site at www.puc.idaho.gov
Click on “File Room” and then on “Electric Cases” and scroll down to Case No.
IPC-E-06-17.